Discounted Upgrades, and the Subsidy Prohibition on Wireless Device Freedom
By now, hopefully you've heard others voice rant against a tyrannical US wireless subscription lockdown and consumer imprisonment over device freedom and choice. It's indeed the underlying argument for the 700Mhz movement for open access conditions. There are other carrier-device subtleties overlooked though in the debate and movement - like device price drops - or subscription price lock-in benefits like discounted device upgrades - and other subsidies that further limit your choice and game you to sheepishly succumb and sign your freedom away for a 2 year go-to-jail sentence. Case in point for these overlooked sentences might well be a phone manufactured by my employer, Sonim. The device is indestructible, and for US Carriers building consumer loyalty at the expense of devices suppliers reduced to subsidies, it sucks. Here's why. Chances are it will last for years [3 years is in fact our warrantee] which means it's not on the same list of other plastics with a 12 month refresh rate common for most wireless users today, which in turn means it's less likely a carrier won't get upgrade subscription dollars. That's not good - for them. They need to lock you into more contractual obligations for connectivity, and that means more newer device lure more often, which in turn diminishes value for ODMs in the process, which in turn is forcing some to move laterally through the value chain and into content, applications & services businesses, which subsequently screws up the ecosystem for content and app providers vying for a small part of the wireless wallet - all of this is a deadly disease slowly nipping away at all involved.
So, until the promise of 700Mhz policy offers more wireless freedom-of-choice, Sonim will continue business operations overseas in more open markets because...
...we don't expect to see it from mobile operators (in the US) - if the phone doesn't eventually break, how would they persuade people to upgrade? - but the XP1 rugged phone should be useful for mobile staff and (let's face it) pretty much anyone.
Jonathan Spinney
in Business Models, Devices, Legislation, Personal, Wireless Freedom
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2 Comments
Reader Comments (2)
My penned posts are often emotive in a heat of passion indoctrinated in the spirit of cluetrain inspiration and as such my tongue disturbs, but I won't apologize for that. Your grounding deserves due attention, and I do agree with the fact that at least 1 carrier (and it was Nextel) was very good at embracing device shelf-life longevity, in fact building business around devices that last a long time.
This particular post was actually a mind-blink-blast, in-time jab at something that disturbed me generally (that being our US mess which I've written about before) and more specifically about the US GSM seeming inability to adjust. Perhaps AT&T's recent announcement of a SIM card sale, minus the device will help. Of course, we all still have the 2 year sentence without a get-out-of-jail-free-card regardless, so I guess I'll still keep pressing along with others, for others I support.